Sunday, May 3, 2009

Is P2P dead?

There have been some significant setbacks for P2P in the past year or so.

Pirate Bay's founders are in jail in Sweden for abetting illegal file sharing on their website.

Joost, the much lauded P2PTV service, is no longer P2P but is instead a CDN-type streaming service.

Another P2P darling, Skype, seems to be adrift with Ebay wanting to get rid of it through a sale or a spinoff.

There is a sustained reduction in CDN costs that is making the P2P cost reduction less attractive.

Websites like You-tube won the video streaming battle against P2P video streaming long ago, now websites like Rapidshare are leaving P2P file sharing behind as well.

Mobile P2P (near-network P2P on mobile devices over Bluetooth etc.) just didn't happen. These devices are more client-serverish than wired devices because upload bandwidth needed for P2P is too pricey.

So the key question is whether P2P is dead.

In my opinion, the answer is No. Here are some reasons

P2P lacks a business model but has proven to be a remarkably resilient and cost-effective technology. The problem is getting legal content on to P2P networks. Content companies are not going to let users take control of content delivery.

But if one is to look at where the biggest growth in broadband usage is going to be, one looks toward China and India. The legal protection for content is significantly weaker in these countries. Moreover, there is a large amount of reasonably priced content (e.g. regional and Bollywood content in India) that will perfectly ride P2P networks.

P2P has proven itself for voip (Skype has 400m users). Skype is the established voip leader and it will remain that way for a long time.

CDNs do not scale with video quality. That is why Youtube won't do HD - they'll go broke paying for CDN (server) bandwidth. P2P on the other hand can scale up to the extent the access networks allow.

What we may see is an amalgamation of CDNs and P2P technologies. For example, using CDNs for paid content and P2P for promoting the paid content (for free). Cache every recent movie's first 10 minutes on a user's computer using P2P, and then stream the content the user selects via a CDN. Although content pricing can recover CDN distribution costs, the monetary transaction only happens after a user selects to watch. Prior marketing can be P2P.